The Chairman of the US Federal Reserve, Alan Greenspan, has praised the economic policies of Mexico and Chile.

In a speech to a conference of senior bankers in Mexico City, Mr Greenspan said sound fiscal policies and commitment to free trade had kept the countries relatively insulated from the economic turbulence affecting Latin America.

He said that Mexico was now seen as a safe haven for investors in the region.

Mr Greenspan warned that countries which relied too heavily on foreign loans made themselves much more vulnerable to periods of economic crisis.